Late Rally Cuts Dow’s Plunge From 102 to 50
Anxiety seized Wall Street today after Monday’s calm, but a late rally cut the loss in the Dow Jones industrial average from 102 points to about 50.
The Dow industrials, a closely watched measure of 30 blue-chip stocks, fell back below the 2,000 mark attained the day before, dropping 50.56 points to close at 1,963.53, a decline of 2.5%.
The volume of trading, an indicator of nervousness, surged on curtailed hours to more than 227 million shares, well above the 176 million traded Monday, which had been the lightest since the Oct. 19 panic.
More than 12 stocks declined for every five that advanced on the New York Stock Exchange.
Still Haven’t Recovered
Analysts said investors have still not completely recovered from the historic selling panic that wiped 508 points off the Dow industrials on Black Monday, Oct. 19.
In addition, there was alarm at the apparent lack of progress on a budget-cutting accord in Washington and worry about the weak dollar.
“Anxiety levels are up,” said Alan Ackerman, an investment strategist for Gruntal & Co. “We’re in a crisis of confidence. We need two cuts: a cut in rhetoric and a cut in the budget deficit and the trade deficit.”
Prices on Wall Street had gone up for five days straight, prompting some investors to unload stocks out of fears that the market was due for a downturn. Bargain hunters coming into the market at the end of the day erased most of the loss.
Dollar Down, Then Up
The dollar dropped sharply at the beginning of trading in New York but later rose above its levels of late Monday. Although the dollar’s fall caused some fears of a resurgence in inflation and interest rates, traders said the market handled the latest instability fairly well.
In other stock markets around the world, the London Stock Exchange’s key index of 100 stocks fell 69.8 to close at 1,653.9, a loss of 4%, while prices in Hong Kong were mixed. Japan’s stock market, the world’s largest, was closed today for a national holiday.
The New York Stock Exchange, the American Stock Exchange and the over-the-counter market, recovering from the last two weeks’ record-breaking volume, plan to get back to normal gradually by remaining open until 2:30 p.m. EST Monday through Wednesday this week and until 3 p.m. EST Thursday and Friday. Regular trading hours are expected to resume next Monday.
